Selling directly to consumers is overrated.
When you’re talking about tech companies and startups with people outside of the tech community, odds are their reference points are consumer-facing companies like Facebook, Google and Snapchat. But the vast majority of Chicago tech companies primarily sell their services to other businesses.
The reasons for Chicago tech’s embrace of the B2B business model are manifold. For one, many of our tech companies are founded by industry insiders looking to address problems the companies they used to work for encountered. But even if you could sell your product directly to consumers, you might want to take a second look at the B2B model.
Launched as a direct-to-consumer weight management startup in 2011, Chicago’s Retrofit did just that last year — and never looked back.
“You can grow a company a lot faster if you’re not doing it one person at a time,” said Retrofit’s CEO Mary Pigatti, who was brought on at the end of 2014 to lead the company’s pivot to focus more on a B2B model.
While the company does still offer its flagship service to consumers, Retrofit has grown substantially by targeting large, self-insured employers and health insurance providers who stand to save substantially on healthcare costs by promoting healthy lifestyle habits among their employees and customers. Since pivoting, the company has brought on a number of big clients including Dr Pepper Snapple Group, PSEG and Yum! Brands, which operates chain restaurants like Taco Bell, KFC and Pizza Hut.
In addition to bringing in steady revenue, working closely with large customers lets the company tailor its programs specifically to the end user’s needs. Yum!, for instance, provides its employees with free meals while they're working. Retrofit worked closely with them to help guide its employees towards healthy food choices from their restaurants’ menus.
Retrofit’s program, which is designed to be accessed entirety from a smartphone, features photo food logging, video coaching, interactive classes and a moderated online community. The app also serves up progress reports in personalized dashboards that are available both to users and coaches.
Pigatti said her company’s interactive program appears to have cracked two of the hardest parts of the weight management puzzle — engagement and outcomes.
“Ninety-seven percent of the people who go through our program complete it,” said Pigatti. “Which is really unheard of in the marketplace.”
Moreover, Pigatti said 88 percent of the people who go through the program lose weight, and 81 percent keep the weight off for at least 12 months.
The results are achieved by leveraging the data provided by users to nudge them to make the right decision at critical points — at lunchtime or in the grocery store, for example.
Image via Retrofit.
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